What the heck are planograms?
When I’ve looked around the web in the past, I’ve been surprised to find very minimal information on planograms. The best explanation I’ve found is on Wikipedia:
A planogram defines which product is placed in which area of a shelving unit and with which quantity. … It is primarily used in [the] Retail sector. Fast-moving consumer goods organizations and supermarkets largely use text and box based planograms that optimise shelf space, inventory turns, and profit margins. Apparel brands and retailers are more focused on presentation and use pictorial planograms that illustrate the look and also identify each product.
Planograms are simply insider maps that show how a section in the store should be set up and laid out.
A better explanation might simply be these planogram images (no affiliation with my work – simply found via a Google Image search) — click any of these to embiggen:
Some are plain black and white with boxes (and associated codes) representing each product.
Others are in color with mini-photos of each product and each facing that should be on the shelf.
And planogram software often generates a detailed set of statistics about each item on the pictograph.
For some background, there are a few reasons why I’ve seen planograms used:
- In stores, outside retail representatives and store staff use official planograms to help reset sections, for general section maintenance, to cut in new items, and to remove discontinued items.
- At headquarters, retailers’ staff creates new planogram standards to accommodate new items, discontinued items, changing set sizes, and so on.
- Manufacturers and their brokers create planogram proposals for new item introductions and during reviews where they hope to win space over competing brands.
This covers some of the basic uses — no doubt, there’s more. And there are issues with planograms on many levels that I think can be improved, and I’ll have more on that in future posts.
There are some standard software packages that create planograms, and the output is generally visually awful. Small typefaces, too-tiny photos of products, harsh colors.
Beyond the aesthetics, analytics within planogram software encourage some measurements that aren’t always efficient for a store. One in particular that drives me nuts is a focus on loading a minimum amount of stock (usually 1 1/4 to 1 1/2 cases) on the shelf to prevent the need to have inventory in the back room. For a case of 12 or 16 units, that usually translates into a standard 2 shelf facings.
When a store stocks slow-moving items, that inventory can sit on the shelf for weeks and weeks — tying up inventory dollars for the retailer and distracting consumers from items that might have broader appeal and match better with the store’s overall proposition — including ones that never get past the buyer’s desk. A best-in-class planogram package might include a way to determine if there’s items with overlapping demand, meaning that one of them is probably duplicative.
Kroger patented their own “system and method for storing planograms” in 2005, so maybe they’re on to some techniques that their competitiors have missed. What are others doing that beyond the conventional wisdom?